Comprehensive Accounting Case Problem (1)
ANALYSIS OF THE FINANCIAL STATEMENTS OF A PUBLICLY OWNED CORPORATION
This Comprehensive Problem is to acquaint you with the content of the financial statements of a publically traded company. The problem contains three major parts, which are independent of one another: Part I is designed to familiarize you with the general contents of a company’s financial statements; Part II involves analysis of the company’s liquidity; and Part III analyzes the trend in its profitability. Since all publically traded companies in the U.S. are required to submit their quarterly (unaudited by independent CPAs) and their Annual Financial Statements (Audited) to the Securities and Exchange Commission (SEC) using generally accepted accounting principles (GAAP) which this course is based on; you will find the recent and complete annual report of such a company using the Edgar search – see next paragraph.
You may choose any US-based publicly traded company related to Sports and Sports Management which is required to file with the SEC. Once you pick a company and find that company’s annual report (10-K) filed with the SEC, email the instructor with the choice, the name of the company and the fiscal year of the Company’s 10-K. You will be able to find the company’s by going to SEC Edgar site on the internet and search Company Filings for the company you would like to use by either the Company Name, or by the Fast Search: using the Ticker symbol or the CIK
The detailed instructions for each part mentioned above and two to four tasks for each part are provided below. You, then will prepare a written report of your analysis of each of these parts as directed. A summary of these tasks is as follows:
Part I. Annual reports include not only comparative financial statements but also other sources of information, such as:
Tasks. Find and analyze specific items in the latest annual report to familiarize yourself with the structure and how such annual report is organized and how to find financial information about the company.
Part II. Analyze the financial statements from the context of credit manager of a vendor of the company as directed.
Tasks. Compute assigned financial statement ratios to determine liquidity and solvency using the usual ratios for these two types of financial analysis presented in Chapter 13 of the text
Part III. Perform a profitability analysis and trend analysis for a five-year period ending with the most recent year reported.
Tasks. Be able to compute and properly report an analysis of profitability and the current trends in recent years.
Write a summary with the following structure: